CME Group rolls out first euro-settled crypto derivatives

Derivatives marketplace CME Group is set to offer its first euro-denominated bitcoin and ether futures this month after the crypto derivatives posted record open interest during the second quarter.

The upcoming cash-payable products are designed to match their US dollar-denominated counterparts. Bitcoin euro futures are set to consist of five bitcoins (BTC) per contract, while ether euro futures are set to start with 50 ether (ETH).

Tim McCourt, CME’s global head of equity and currency products, said demand for risk management solutions from institutional investors outside the US is increasing as uncertainty in the crypto market persists.

Euro-denominated cryptocurrencies are the second most traded fiat behind the US dollar, McCourt added. The number of bitcoin and ether contracts traded in Europe, the Middle East and Africa represents about 28% of worldwide totals, he said, which is up more than 5% from 2021.

The upcoming launch comes after CME’s crypto derivatives posted record high interest — an average of 106,000 contracts per day — and higher than average daily volumes of 57,000 contracts during the second quarter.

In July, daily open interest on the exchange’s crypto products averaged nearly 127,000 contracts, a Blockworks spokesperson said, up 59% from the previous month. Average daily volume on these products was about 62,000 contracts – about 11% higher than in June.

CME began offering bitcoin futures in 2017 and went on to add an ether version in February 2021. The company launched cash-settled microbitcoin futures contracts — worth 10% of one bitcoin — last year and moved in November to add microether futures, such as the Liquidity of Ethereum grew.

“At this time, we have no plans to introduce additional products,” a CME Group spokesperson told Blockworks. “We remain focused on continuing to expand our current suite of crypto offerings.”

Micro ether futures in particular are gaining momentum, as more than 3.2 million such contracts have traded over the past eight months, CME Group reported.

Average daily open interest for microether futures reached 47,000 contracts in July, while average daily volumes reached nearly 26,000 contracts – up 43% and 41% respectively from June.

A CME spokesperson attributed the rise in part to ether’s rising price, noting that the micro ether contracts were set at $1,014 on June 30. The price of ETH at 3pm ET was about $1,600.

The representative also called Ethereum’s upcoming merger, the blockchain’s transition from a proof-of-work consensus mechanism to a proof-of-stake option, “one of the most anticipated events in the crypto space to date.”

The spokesman said 78% of micro ether options expire in September or December, suggesting traders are hedging the risk ahead of the merger.

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